Published: Fri, May 10, 2019
Markets | By Erika Turner

Oil steadies as US-China trade war balances inventory drop

Oil steadies as US-China trade war balances inventory drop

Crude stockpiles had risen by a net of almost 30 million barrels in five earlier weeks, and oil bears had expected the trend to continue.

U.S. crude oil stocks fell by 4 million barrels in the week to May 3, the Energy Information Administration said on Wednesday.

Wednesday's firmer prices partly reversed bigger price falls earlier in the week, which were triggered by announcements from Washington that the United States would this Friday further hike import tariffs on Chinese goods.

Gasoline stocks fell by 596,000 barrels, while distillate inventories fell by 159,000 barrels, the data showed.

US Energy Secretary Rick Perry told CNBC on Tuesday that Saudi Arabia is increasing its oil production to meet needs arising from sanctions on Iran.

Benchmark Brent crude edged down 0.1 percent to $70.33 a barrel, while U.S. West Texas Intermediate (WTI) crude futures were down 0.4 percent at $61.88 per barrel.

While Iran's crude oil exports to India, at Rs 35,395 per tonne, were relatively cheap in 2018-19, the U.S.'s crude exports, at Rs 39,843, were among the most expensive.

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We're looking for another choppy, two-sided session on Wednesday unless there is a major surprise in the government's weekly inventories report.

White House spokeswoman Sarah Sanders said on Wednesday the United States had received an indication from China that Beijing wants to make a trade deal. China's commerce ministry confirmed on Tuesday that Vice Premier Liu He will visit the United States from May 9-10 for bilateral trade talks at the invitation of senior USA officials.

Early in the session, prices rose as the us sanctions against Iran and Venezuela and the ongoing production cuts by OPEC and its allies continued to tighten supply.

"So people have been bearish because of that".

Fuji Oil Co bought 1.5 million barrels of Oman crude, Banoco Arab Medium from Bahrain, and Upper Zakum, an Abu Dhabi grade, to load in June in a spot tender held last month, according to trade sources. "We should increase production and raise our (non-oil) exports and resist America's plots against the sale of our oil".

According to EIA's data, USA crude oil production averaged 12.2 million barrels per day (b/d) last week, down by 100,000 b/d from the previous week and up by about 1.5 million b/d year-on-year.

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